But instead of rising as feared, mortgage rates have drifted lower over the year. Freddie Mac said Thursday that lenders were offering 30-year loans to solid borrowers at an average of 4.14%, down from 4.17% last week.

Translated into the actual rates offered to borrowers, that would mean a loan at 4.125% compared with 4.5% a year ago, lowering the annual payments on a 30-year mortgage for $400,000 by more than $1,000.

The lowest-risk borrowers were getting 30-year loans this week at 3.875% by paying 1% of the loan amount upfront, according to Jeff Lazerson at the Mortgage Grader loan brokerage in Laguna Niguel.

Fed chief Janet Yellen has remained true to the stimulus-cutting pledge, reducing monthly purchases of mortgage-backed securities from $40 billion to $15 billion, with the latest $5-billion reduction announced last week.

As recently as March, the Fed was buying more than 80% of all mortgage-backed securities being issued, according to Mark Zandi, chief economist of Moody's Analytics. That has now declined to about 50% of mortgage bonds, he said.

Yet the slow economic recovery has brought little news to rekindle fears of inflation, which would tend to send rates higher.

Freddie Mac's chief economist, Frank Nothaft, noted that the government said this week that the decline of the winter-gripped economy in the first quarter was 2.9% -- greater than initially calculated.

And while home prices are up in double digits year over year, the latest monthly change in the S&P/Case-Shiller 20-city price index was just 0.2%, Nothaft said.

The consumer price index, a leading measure of inflation, fell last month into negative territory over a 12-month period for the first time since the fall of 2009, when the nation was just emerging from recession. It also fell from December, the third straight month-to-month decline.

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